When last I gleefully waved my paycheck in anyone’s face I was earning my first dollar an hour. But as wages and responsibilities grew, they became my private business.
So, I understand why titans of industry get ticked when their salaries are paraded for public pillorying. But my nerves get rattled when my telephone bill arrives with minutiae that totals up to more than my first teen-age work week. And when nobody at the utility can simply explain how my phone bill was concocted, I become more inclined to question why the digital big cheese merits his millions.
The same holds true in spades when it comes to healthcare. Nothing about medical costs, and very little about the care processes, can be translated into seventh-grade text, which was long the benchmark educational standard for writing and editing daily newspapers (where I worked for 30 years). And when I worked as a government advocate for a nonprofit hospital system, I saw the same bewilderment among the very industry fiscal experts and government regulators who built and papered over for decades the acronym soup that drains checkbooks and fattens frustrations.
Those twin thorns of healthcare costs and executive compensation are again being furiously wiggled in Sacramento by lawmakers, community activists and labor organizers using legislation and ballot initiatives.
It’s the usual carrot and stick. Labor leaders usually want access to additional hospital members and their dues. Pouncing on hospital complexity is a reliable weapon.
When it comes to finances, critics reach deep into the murk of charity care, community benefits, bad debt, profit margin and costs vs. charges to dig a labyrinthine trench that only CPAs and $500-an-hour lawyers can assess. The critics don’t help the Twitter universe define what constitutes charity care even as they parse it in more puzzling ways to dramatize their case.
They don’t clarify evolutions underway in the post-Affordable Care Act world in which more people are granted coverage but not pathways to access it – in part because the payment methodologies don’t encourage broad physician participation.
When it comes to compensation, critics are now stretching their reach beyond the top tier of nonprofit leadership – who are already required to publicly report their compensation on the federal 990 forms – and invading layers of health professionals whose salaries, bonuses, overtime, pension and other compensation may total $250,000 annually. That’s potentially a heckuva lot of people – if the clear purpose is outrage, what is the good end?
Fact is, the sizable salaries of numerous elected and professional California employees – from mayors to police and sanitation workers – are accessible on many public websites including the libraries of large daily newspapers. Yet the same labor leaders who levy multipliers of how hospital executives are paid hourly compared to rank and file staff have themselves mustered legislative and legal challenges – up to the Supreme Court – to quash or limit how easily fellow union members can determine how their dues are spent and where they’re given a voice.
Hospital CEO salaries are not a significant factor in health costs – the big money goes to total employee wages and benefits, and pharmaceuticals and new technologies. The California Hospital Association estimates that average total compensation for a hospital CEO is less than one-tenth of one percent of a hospital’s budget.
Both the finance and compensation chokepoints are usually carefully targeted so as to affect nonprofit hospitals that are not already solidly in the hold of organized labor.
The ballot tactics require tens of millions of dollars to execute – and millions more by their targets to defend. So many ballot initiatives were floated this year that it’s been reported that California petition workers were paid $5 for each valid signature gathered.
These so-called fair billing and equitable compensation campaigns inject neither illumination nor innovation where the public needs it. They are retributive -- not remedial -- efforts.
In reality, various hospital systems are implementing bare-bones billing policies. Their true value ultimately will be reliably equating them with quality outcomes. Some chargemaster policies no longer bill patients for items – such as ibuprofen or antacid – if they’re available over the retail counter at places like a hospital’s outpatient pharmacy. That’s a good first step to eliminate the $15 aspirin headline.
And hospitals – the ones that will survive, anyway – are fast moving away from keeping every bed filled and every practice specialty flooded with patients and switching to benchmarking success by years of quality, productive living returned to patients in cost-effective manners. That’s a longer haul.
On compensation, California healthcare is a unique beast in job complexity, especially in the nonprofit world. The California state Legislative Analyst’s Office says that 70% of the state’s hospitals are nonprofit, most of them providing the state’s largest share of care to the neediest of patients. Volunteer boards of trustees usually oversee how nonprofit execs are paid and vet their strategies. Board members usually live where the hospitals conduct business, and often go there for medical care. They don’t live over my back fence but they’re way more reachable than Wall Street.
The recurring political targeting of hospital pricing and executive comp doesn’t address what’s ailing us. It’s diversionary. Its only transparency is its own self-serving nature.
(Also published as an op-ed in the May 21, 2016 edition of The Fresno Bee)